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How Would An Ad-Supported Video Game Streaming Service Work?

Video games, like television & other forms of media content, are going through an era of transition that will change the industry as we know it. As the availability to better broadband and bandwidth has become more accessible to consumers, the purchasing of digital goods has grown. And with this, the trend of subscription-based streaming services has also grown.

The ways content is consumed today.

But before we continue onto video game streaming, let’s first talk about where a similar media product is at and make a comparison. Like we mentioned before, media like films and tv shows, are one of the most similar to video games. Not just because of this transition period video games is in right now, but because it is consumed at home, on television, and even on mobile. And it is consumed a lot. According to Nielsen, an average of all adults watch +4 hours of television a day. Below, we have a chart based on that data from Statista.

Infographic: The Generation Gap in TV Consumption | Statista You will find more infographics at Statista

And that’s not all.

Media consumption in general, which includes everything from TV & radio to phones, tablets, and game consoles is up too. The average American is “spending more than 11 hours a day on average“. To put that in perspective, that is eleven out of the twenty-four hours we have in a day. The increase in consuming content this way has brought paying for digital content to become a regular thing. And not just one time purchases for content.

The access to devices that enable viewing of streaming content natively is pretty high. According to Nielsen, “Two-thirds of U.S. TV households have devices capable of streaming content to the TV set“. And according to that same report, “64%” of total households subscribe to a “Subscription-based video on demand (SVOD) service”. This correlates pretty well when you compare the rise of digital content consumption and decline of purchasing physical media.

Below, you can see a chart of Netflix’s subscribers and on the right a report from the MPPA (The Motion Picture Association of America). On page thirty of the report, you can see the decline of physical media purchases starting in 2014. By 2018, it was cut nearly in half. Netflix isn’t the only one growing. So is Hulu, which is now owned by Disney and could get a big push from the entertainment giant. You can read more about the decline in disk sales here.

Infographic: Netflix Reaches 149 Million Paid Subscribers | Statista You will find more infographics at Statista

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Statistic: Breakdown of U.S. computer and video game sales from 2009 to 2017, by delivery format | Statista
Find more statistics at Statista

And much like what is happening to movies, is also happening to video games. Sales for digital video games and content related to it are increasing. This is while physical copies for games are decreasing. Something that most likely will continue to happen as video game streaming becomes mainstream.

The future for video games is now (well, kind of now).

Now that we know a bit about where media consumption is at today for media like television & film, let’s talk about video games. Recently, video game streaming services are starting to rise. And like we have previously mentioned in another post about video game sales, there are already a couple of them available and soon to be released.

Some of the most notable ones are from Google and Microsoft. Microsoft is going for more of a Netflix-type way. Allowing subscribers access to video games for a monthly subscription. This includes first-party games like “Halo” and smaller indie titles. But, they also have another service that is still a bit vague on how it is going to work. It’s titled “xCloud” and will use the power of Azure to bring cloud-game streaming to any device. You can read more about it here.

What is confirmed is that Xbox owners will have this “xCloud” service free. It will be part of a future update as they continue to test this project. Now back to Google. “Stadia,” Google’s attempt to enter the mainstream gaming community is in my opinion, a pretty ambitious product. It promises 4k gaming at 60fps, among other features. So far, they haven’t really said what games you can get with the $9.99 a month subscription, but they did confirm “Destiny 2” was going to be available with it. With the “Stadia,” you can play on basically any device. Most importantly, mobile devices. For now, it is limited to Pixel phones, but I imagine that it will expand beyond them and onto more Android-based devices.

Mobile is where it’s at.

Mobile is an important player in this game (pun, intended). The rise of mobile gaming is insane. This is of course because of the accessibility vs traditional console & pc gaming. According to App Annie, “In 2018, mobile game spending was 2.1x PC/Mac gaming and 2.8x home game consoles”. This could increase even more once console-like game streaming starts becoming mainstream. And it’s not only Microsoft & Google thinking about this.

To my surprise, Bethesda unveiled “ORION” at E3 2019. It is not a separate streaming service, but it does enhance the way games look and the amount of bandwidth needed to play. In Bethesda’s FAQ page, it states that ORION is:

Orion is patented game streaming technology that optimizes game engine performance in the cloud. It is game engine and cloud platform agnostic.

Bethesda.net

This is going to be very important because it will allow developers to create games and allow those games to run as best as possible with low bandwidth. Which means that more people will have access to games. According to Pew Research Center, minorities and rural neighborhoods, along with “those with lower levels of education and income are less likely to have broadband service at home”.

Ad-Supported Video Game Streaming: How would it work?

This is the tricky party. And something I was asking myself on Twitter (tweet above) about it. How can an ad-supported streaming service be made? I believe the first thing that should be done is to focus on the user experience. Be able to create a way to advertise without seeming too intrusive. Lots of games are played online and are mulitpayer which make it difficult to pause the game. Why would a mid-roll ad be functional? Now in a story based game like “The Elder Scrolls” or “The Witcher”, you could get away with it.

Other types of advertising could involve banner ads, are they really as effective as they when they started back in the 90s? I do think that if gamers are given access to what are called “triple-A games,” they would welcome something less invasive for them and more effective for advertisers.

The possibilities of ad-supported, video game streaming services could be beneficial, not just for advertisers, but also for smaller game developers. Not only can they sell what the have made, but they can also be able to have steady flows of income through ad-supported game streaming. Other than that, let’s just hope it doesn’t turn into this.

Nintendo switch with advertisements.
How Would An Ad-Supported Video Game Streaming Service Work?
A cursed image photoshopped by yours truly.

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